Senate approves TEC cost study bill
Governor expected to sign act
BY CHERYL DAGON, BREEZE-COURIER WRITER

NOVEMBER 21, 2008 – TAYLORVILLE-A project which would position the world's cleanest coal-based energy facility in Christian County took another step forward yesterday with the passage of Senate Bill 1987, the Clean Coal Portfolio Standard Act.

The project, the Taylorville Energy Center, is expected to return economic prosperity to an area which once thrived on its coal mines.

SB1987 authorizes developer Tenaska to proceed with a multimillion front end engineering and design study to construct a 525-megawatt hybrid integrated gasification combined cycle energy plant, which would also sequester 50 percent of carbon emissions.

TEC would be the first commercial plant to use hybrid IGCC technology, which processes coal into clean synthetic gas and then reprocesses synthetic gas into higher energy methane, reducing emissions and improving efficiency.

The bill's co-sponsor Sen. Deanna Demuzio (D-49, Carlinville) was elated Friday morning as she recapped the bill's passage with a vote of 53-0.

"It wasn't easy - there were a lot of us working the floor hard to come out with that vote."

SB1987 was pulled from consideration last week when proponents ran into heavy questioning in committee. In the interim, Tenaska and the office of Attorney General LIsa Madigan, who has supported the bill with determined negotiation, worked to explain the bill's built-in safeguards to small utility companies opposed to the act.

Out of committee, SB1987 had been scheduled for a vote on Thursday. Then the city of Chicago entered its objections to TEC's unknown energy costs.

"We just don't know what the price of anything will be tomorrow," Demuzio said. "We are in a volatile economic environment - there's a lot of instability. However, they agreed to stay neutral and allowed us to get the support we needed."

Demuzio said she had talked with Gov. Rod Blagojevich Friday morning, and that he continues to support the bill.

"I'm very excited for Taylorville. The passage of this bill speaks volumes for the community."

SB1987 requires that once the study is completed, projected costs will be analyzed by the Illinois Commerce Commission before the study is referred to the General Assembly for construction approval.

Dual authority oversight was put in place to assure utility producers and carriers that they would not be hung out to dry with high purchase costs and to assure legislators and oppositional groups that customers would not be hit with out-of-sight utility costs, as occurred when Illinois deregulated the utility industry.

A third body, often overlooked in discussion of TEC, according to Bart Ford, vice president of business development for Tenaska. is the Federal Regulatory Commission.

"The commission also reviews the cost plants set for the wholesale market, the utility companies. The commission's standard is that costs must be 'just and reasonable.'"

Ford said Tenaska was appreciative of all the support the bill garnered on the floor Thursday. "Sen. Frank Watson (R), Senate Minority Leader and a supporter of the bill, returned yesterday from recovery from a stroke. He made quite an impression out working the floor.

"Rep. Gary Hannig (D) was also on the floor, working hard to get this done. It took everybody, but it finally came together."

A supplemental bill approved by the House and the Senate approved issuing coal development bonds to cover the state's $18 million reimbursement for the cost study. Ford said Tenaska will pick up the remainder of the total cost, projected to be in the low $20 million range.

Ford said Tenaska is now in the process of finding a lead engineering and construction contractor for a study he believes can be completed within 12 months. Tenaska's goal is to be back in front of the legislature in midyear 2010.

Tenaska recently purchased 164 acres northeast of Taylorville for the site of the Taylorville Energy Center. The company also announced it will purchase another 165 acres in December.

The Taylorville Energy Center is being developed by Christian County Generation, LLC, a joint venture between Tenaska, basked in Omaha, NE, and MDL Holding Co. of Louisville, KY.

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